Average mortgage down 12.5% in February

Figures released by the National Statistics Institute (INE) show a drop in the average value of mortgages in Spain in February with a decrease of 12.5%, compared to the same period in 2011.

However, there was an increase of 4.8% in the number of existing mortgages that changed conditions, while the number of cancelled mortgages decreased 12.7%.

During the month of February, the average amount of mortgage constitutions recorded in the land registries stood at 112,179 euros, a figure 12.5% lower than the same month the previous year and 8.8% lower than that recorded in January 2012.

In the case of mortgages constituted for dwellings, the average amount was 104,868 euros, 14.6% less than in February 2011, and 2.2% less than that registered in January 2012.

The value of the mortgages constituted on urban properties was 4,615 million euros in February, indicating an interannual decrease of 50.1%. In dwellings, the capital loaned exceeded 2,770 million euros, 54.8% less.

Mortgages by institution  

Banks were the institutions that granted the largest number of mortgage loans in February (66.0% of the total), followed by Savings Banks (16.7%) and Other financial institutions (17.3%).

Regarding the capital loaned, Banks granted 66.3% of the total, Savings Banks 17.5%, and other financial institutions 16.2%.

Mortgage interest rates

The average interest rate in February 2012 was 4.35%, indicating a 17.3% increase in the interannual rate, and a decrease of 1.6% as compared with January 2012.

By institution, the average interest rate of Savings Bank mortgage loans was 4.23%, and the average term was 23 years. Regarding Banks, the average interest rate for mortgage loans was 4.54%, and the average term was 21 years.

94.2% of the mortgages constituted in February used a variable interest rate, as opposed to the 5.8% that used a fixed rate. Within the variables, the Euribor was the reference interest rate most used in constituting mortgages, specifically in 86.5% of new contracts.

Mortgages with registration changes

In February, the total number of mortgages with changes in their conditions recorded in the land registries stood at 32,588, with an interannual increase of 4.8%. For housing, the number of mortgages with modified conditions decreased 6.9%.

Considering the type of modification of the conditions, in February 26,428 novations (or modifications produced within the same financial institution) were produced, for an interannual increase of 2.8%. The number of transactions that changed institutions (subrogations creditor) was 4,516, that is 20.8% more. In turn, 1,644 mortgages changed the holder of the mortgaged property (subrogations debtor), which implied an increase of 0.7%.

Number of mortgages with changes in interest rate conditions 

Of the 32,588 mortgages with changes in their conditions recorded in the land registries in February, 24.9% were due to changes in interest rates.

The percentage of mortgages at a fixed interest rate decreased after the change in conditions (from 9.3% to 4.1% of the total), since most of these loans were referenced to a variable interest rate. Within the interest rate structure, the Euribor was the main reference. The lowest average interest before the change was that corresponding to MRTI of Banks (4.44%) and after the change was Other Interest rates (3.72%).

After the modification of conditions, the average interest of the loans decreased 0.97 points in fixed interest rate mortgages, and decreased 0.71 points in variable interest rate mortgages.

Registered mortgage cancellations 

In February, 40,658 mortgage cancellations were registered, 12.7% less than in the same month of 2011. Mortgages cancelled on rustic properties increased 9.6%, whilst those cancelled on urban properties decreased 13.4%. Cancellations of mortgages on dwellings decreased 16.6% in the interannual rate.

Geographical distribution

The highest numbers of mortgaged properties per 100,000 inhabitants¹ was in Illes Balears (169). There is no community that presented a positive variation rate. The greatest negative variation rates was registered in La Rioja (-70.8%).

Pais Vasco registered the highest average mortgaged amount (169,482). The Autonomous Community presenting the highest positive variation rates was Cantabria (26.4%).

The Communities showing the highest number of properties with modified conditions in February per 100,000 inhabitants¹ were Comunitat Valenciana (156) and Castilla-La Mancha (132). Those having the greatest number of registered mortgage cancellations per 100,000 inhabitants¹ were La Rioja (184), and Comunitat Valenciana (156).

¹ This data was calculated from the revision of the figures of the Municipal Register for the year 2011. Only the population aged 18 to 84 years old was considered.

You can read the full press release here: Mortgage Statistics - February 2012

Increase in number of new businesses

The number of new companies created in Spain rose 3.2% during February, compared to the same month in 2011, according to figures released by the Instituto Nacional Estadística (INE).

However, the number of companies dissolved increased by 10.9%.

8,214 mercantile companies were created in February, 3.2% more than in the same month of 2011, and 3.3% more than in January 2012. The capital subscribed for their constitution exceeded 551 million euros, 87.6% more than in February the previous year. The average capital subscribed (67,130 euros) registered an interannual increase of 81.8%.

On the other hand, 3,892 mercantile companies increased their capital in February, 12.9% more than in the same month of 2011. The capital subscribed in the increases registered an interannual increase of 9.1%, and exceeded 4,531 million euros. The average capital subscribed in these transactions (1,164,304 euros) recorded a decrease of 3.4%.

The number of companies dissolved in February was 2,245, indicating an interannual increase of 10.9%. Of these, 76.9% did so voluntarily, 7.9% due to mergers and the remaining 15.2% for other reasons.

Results by type of company

26.8% of the mercantile companies created in the month of February corresponded to Construction and property development and 19.2% to Trade.

Out of the total mercantile companies created in the month of February, 99.5% were private limited companies and 0.5% were public limited companies. Out of the total companies that increased their capital, 91.1% were private limited companies and 8.9% were public limited companies.

95.0% of the capital registered by the mercantile companies created was subscribed by private limited companies, and 5.0% by public limited companies. Regarding the capital subscribed in capital increases, 54.6% corresponded to private limited companies, and 45.4% to public limited companies.

The interannual rate of the number of public limited companies decreased 21.4% in February. In turn, the rate of private limited companies increased 3.4%. Considering the companies that increased their capital, the number of public limited companies registered an interannual increase of 9.5%, and private limited companies increased 13.5%.

The capital subscribed by the public limited companies created increased 6.0%, while the capital subscribed by private limited companies increased 95.5%. As per the capital subscribed by the companies increasing their capital, the interannual rate for public limited companies increased 15.6%, and the rate for private limited companies 4.2%.

Results by Autonomous City and Community

Comunidad de Madrid presented the greatest average capital subscribed by the mercantile companies created in February, with 114,808 euros. In turn, La Rioja registered the least average capital subscribed (8,256 euros).

Cantabria recorded the greatest average capital subscribed by companies increasing their capital (2,788,711 euros), while La Rioja recorded the least average capital subscribed (242,286 euros).

Out of the total capital subscribed in the creation of mercantile companies during the month of February, Comunidad de Madrid accounted for the highest percentage (35.2%), while La Rioja recorded the lowest percentage (with 0.1%).

Regarding the total capital subscribed by the mercantile companies increasing their capital, Comunidad de Madrid registered the highest percentage (32.6%), while La Rioja recorded the lowest (0.1%).

The full press release can be downloaded from INE here: Mercantile Companies Statistics - February 2012.

Property sales figures still falling

The Instituto Nacional Estadística (INE) have released data showing the number of property transfers decreased 8.7%, compared to February 2011.

The number of property transfers recorded in the land registries, from public deeds previously registered, was 150,422 in February, that is, 8.7% less than for the same month in 2011, and 0.5% lower than in January 2012.

In the case of registered merchantings of property, the number of transfers was 67,217, representing an interannual decrease of 22.7%, and a decrease of 6.2%, as compared with the previous month.

Merchantings recorded in the land registries 

85.9% of the registered merchantings corresponded to urban properties and 14.1% to rustic properties. Among the urban properties, 53.2% were merchantings of dwellings.

The number of merchantings of rustic properties increased 9.5% in the interannual rate in February, while that of urban properties decreased 26.2%. Within the latter, merchantings of dwellings decreased 31.8%.

Registered merchantings of dwellings, by protection system and status 

85.6% of transfers of dwellings by merchanting in February were free housing, and 14.4% were protected housing. In interannual terms, the number of transfers of free dwellings by merchanting decreased 32.4% and that of protected dwellings decreased 28.6%.

53.5% of the dwellings transferred by merchanting in February were new, and 46.5% were used. The number of transactions on new dwellings decreased 26.5%, and the number of used dwellings decreased 37.1%, as compared with February 2011.

Geographical distribution

In February 2012, the total number of property transfers recorded in the land registries per 100,000 inhabitants¹ was highest in the Autonomous Communities of Castilla y León (642), Aragón (636) and Castilla-La Mancha (635).

In Andalucía there were 21,380 property transfers recorded in the land registries. This represents 322 transfers per 100,000 inhabitants¹. This can be further broken down by property type. Of the total transfers 3,548 were rustic properties, 10,413 were urban dwellings, and 1,267 plots. “Other urban properties” made up the remaining 6,152.

The Autonomous Communities showing the highest number of registered merchantings of property per 100,000 inhabitants¹ were La Rioja (273) and Castilla-La Mancha (261).

By registered merchantings of dwellings, the Autonomous Communities in which the number of transfers per 100,000 inhabitants¹ was highest was Illes Balears (104).

59.5% of merchantings of dwellings in February 2012 were recorded in four Autonomous Communities: Andalucía, Cataluña, Comunidad de Madrid and Comunitat Valenciana.

You can download the full press release here: Statistics on Transfer of Property Rights – February 2012.

¹ This data was calculated from the revision of the figures of the Municipal Register for the year 2011. Only the population aged 18 to 84 years old was considered.

House prices same as 2004

TINSA have released a new house price report for February 2012 showing property prices are continuing to fall.

The General IMIE Index, an indicator created by Tinsa to analyse the evolution of house prices in the Spanish market, increased its year-on-year decline in February, falling by 9.5% to 1664 points, returning to the levels of 2004. The cumulative decline from the top of the market in December 2007 increased to exactly 27.1%. The deterioration of the macroeconomic environment with significant job losses, together with an increase in the spread on mortgage rates, are offsetting the positive effect of reinstated tax breaks on house purchases.

	Index February 2011	Index February 2012	Year-on-Year Variation
General	1839	1664	-9,5%
Capitals and Major Cities	1931	1710	-11,5%
Metropolitan Areas	1804	1618	-10,3%
Mediterranean Coast	1885	1706	-9,5%
Balearic and Canary Islands	1567	1428	-8,8%
Other Municipalities	1820	1701	-6,5%

With regards to the performance of the different market segments, “Capitals and Major Cities” once again recorded the severest decline in February of 11.5%, followed by “Metropolitan Areas” with a fall of 10.3%, compared with the same month the year before. In both cases the decline was greater than the market average.

With a similar level to the General Index, the municipalities of the “Mediterranean Coast” segment declined by 9.5% year-on-year.

The “Balearic and Canary Islands” were below the average with a year-on-year fall of 8.8%, while “Other Municipalities”, which includes those not included in other segments, declined by 6.5%, completing the series.

In relation to the overall decline from the peak of the market, the “Mediterranean Coast ” showed a fall of 34.1% to February; followed by “Capitals and Major Cities” with 29.7%, “Metropolitan Areas” with 28.9%, the “Balearic and Canary Islands” with 24.7% and “Other Municipalities”, which refers to those not included in other categories, with 21.5%.

The TINSA report can be downloaded here: IMIE February 2012